Pricing strategies are normally not on the radar when you’re starting a business. However, how to price your products and services is one of the most important decisions you must make in your business.
This is because the way you set your prices plays a major role in how much you sell. It also gives you a way to set your offers apart from the competition and customize these offers to your customers’ preferences.
This is the third article in a series on How to Price Your Services. Here are links to the other articles:
- 4 Best Practices for Pricing Your Services Right
- How To Set the Right Prices Using Customer-Driven Pricing
- 6 Pricing Strategies That Will Immediately Boost Your Sales
6 Pricing Strategies That Will Immediately Boost Your Sales
Here are 6 creative pricing strategies that allow you to offer more than just the standard price for your services.
1. Package Pricing
Package pricing offers different levels for the customer to choose from.
For example:
- A Basic Level might offer a simple version of the product without any extras.
- Regular Level is the middle one that offers all that your customer requires.
- Premium Level offers every feature, priority support, and extra goodies.
You can also give your package levels other titles e.g. Bronze, Silver, Gold.
When you use package pricing your customer gets the option to pay what they’d like for the product and enjoy only the features they need.
I’ve created a detailed article on how to create packages that match what prospects want. Check it out at this link.
This is the easiest and most common of the 6 pricing strategies shared here. It’s also one you can benefit from immediately if you have more than one offer.
2. Position Yourself as a Luxury Brand
Generally, people assume that when you undercut the competition, your sales will increase. This is usually true.
But there is another pricing strategy that’s the exact opposite that works even better. You charge more than your competitors but really drive home in your marketing the unique benefits that only your product or service offers.
This way, you position yourself as a more advanced version of something people could get cheaper.
It takes a bit more effort on your part in positioning your products in the market, but you’ll earn more per sale than your competitors do.
For example, a Coach can create a private members’-only community just for her clients. This is where she connects her clients with each other and offers other services such as a weekly or monthly webinar and a private weekly podcast.
This makes it easier for someone who was undecided to sign up to work with her instead of one of her competitors.
3. Decoy Pricing
With this pricing strategy, you set your price slightly higher than you expect your customers to pay. Then you offer sales and deals when you want to make more sales.
You can also offer discounts that influence buyer behaviour such as getting people to:
- Share your offer(s) on social media.
- Send you referrals.
- Join your email list.
The secret to this strategy is that the sale price is actually your target price.
4. Freemium
This is more common with apps and software programs than it is with the services sold by self-employed professionals.
With this pricing strategy, you offer a free and premium version of your product or service. The free version has very limited features to give the customer a taste of what the premium version offers.
Some people will upgrade to the premium version after enjoying the free version.
The most common freemium strategy I have seen among coaches is having a free community.
This is where you show up consistently and offer tips and resources for your intended audience. As your community grows, so does your ability to get clients from within the community instead of regular marketing.
The community can be a group on Facebook, WhatsApp, Signal, Telegram or any other platform that works for you.
However, you need to take care not to give too much in the free community, a mistake that I made. This will work against you because people will not see the need to sign up for the premium offer.
You also need to ensure that the people in the community match your ideal client criteria. Otherwise, the community will be a waste of your time, energy, and ultimately, money!
5. Bundling
This is one of my favourite pricing strategies, especially when sales are low and when I want to create passive income streams.
With the bundling strategy, you combine products and services that your customers would benefit from buying together. Then you offer them as a bundle at a discounted price.
With the bundle, the customer gets each individual product at far below its individual price. Just like decoy pricing, your target price can be the bundle price, and this can be used to influence buyer behavior.
You’re going to see bundling and package pricing in action here on Biashara 360 as we set up and grow our membership site.
We’ve started the site with the Profitable Pricing for Self-Employed Professionals e-course, and this is currently the only product on the site.
We’re going to add the following features as we add more courses:
- Bundles for courses that would go well together. You buy once and work through the courses in your own time.
- A membership that gives you access to one course at a time but at a lower fee than if you purchased the course on its own. You can pay for membership monthly, quarterly or annually.
- The quarterly and annual packages have more benefits than the monthly one.
- There will be a community platform for people who are in the membership. This platform has additional resources and bonuses such as access to weekly group Q&A calls with Business Coaches.
- Members also get discounts for Strategy Sessions with Business Coaches.
This way, someone can purchase a course on its own or they can sign up for the membership. Overall, the price of accessing the courses will be lower for those in the membership than the people who purchase the courses once-off.
6. Dynamic Pricing
This pricing strategy is more common among airlines, tourism, and travel industries.
With dynamic pricing, you adjust prices based on demand to maximize profits. The price goes up during high volume buying seasons and down during the off-season.
Most large companies use algorithms to set prices automatically, sometimes varying minute by minute. While you may not get that level of detail, you can still adjust your pricing for maximum profit.
The best thing about dynamic pricing is that it helps you drive more sales during times when you don’t usually sell a lot. It’s also useful at general peak purchase seasons such as Black Friday, Cyber Monday, Christmas, and such.
Try These Pricing Strategies!
These creative pricing strategies offer more flexibility for you and your customers and can boost your sales. Experiment with some of these out-of-the-box ideas and see what works best for you and your business.
Do you want to learn more about setting the right price for your products and services?
Check out my course, Profitable Pricing for Self-Employed Professionals, which teaches you the A to Z of setting prices and helps you achieve your business goals.
Click here to find out more about the course.
(Image Credit: Pexels)
